I&M Group's share price has retreated 34.1 percent in four trading days, reversing most of the 66.3 percent one-day rally that lifted the stock to a record high of Sh34.25 on Wednesday last week.
The share price has been correcting steadily, dropping by close to the maximum allowed daily margin of 10 percent on small volumes.
The stock had dropped by 9.9 percent by midday on Tuesday to stand at Sh22.55, declining from Monday’s closing price of Sh25.05.
The jump of 66.3 percent was, however, on a large volume of 4.62 million units and came on the day the lender announced a 17.4 percent net profit growth to Sh5.6 billion in the half-year ended June.
The bank did not declare an interim dividend. The company has, however, been raising its annual dividend payouts in recent years amid increased profitability. It paid a final dividend of Sh2.55 per share for the year ended December 2023, increasing it from Sh2.25 that was distributed for the previous year. Â
I&M's share price was trading at Sh20.60 on Tuesday before the results announcement.
Investors selling their holdings after the rally have not gained much as only a small volume of shares have been bought amid expectations that the share price will settle at the level it was trading before.
Only 11,100 I&M shares had been traded in the three days ended Monday, according to market data.
The bank’s profit growth is attributed to higher income from lending to customers at a time of high interest rates in the economy. I&M posted a 35.2 percent jump in net interest income to Sh16.5 billion in the period.
The Kenyan unit drove the growth in interest income, increasing its net interest income by 37 percent to Sh11.2 billion.
The bank also saw an increase in its cost of funds as a result of higher interest rates, with interest paid on customer deposits rising by 65 percent to Sh12.03 billion.
Operating expenses rose 14 percent to Sh14.3 billion after staff costs rose by a fifth to Sh4.18 billion, reflecting the bank's ongoing expansion drive which saw it open eight new branches in January with plans to add 12 more by the end of the year.
Income from operations grew in the corporate and retail segments, which saw increases of 49 percent and 34 percent respectively with the regional units contributing 30 percent to the group's operating income, which stood at Sh22.67 billion in the period.
The bank's non-funded income fell by 11 percent to Sh6.16 billion due to a 38 percent reduction in income from forex trading to Sh1.82 billion.
